TaxTMI 
TaxTMI 
2011 (6) TMI 913
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.... debts. Second part of this ground is against the restoration of the disallowance on account of bad debts in respect of Inabling Technologies P. Ltd. 3. Briefly stated, the facts of this ground are that the assessee was engaged in the business of internet and web hosting services. A sum of ₹ 59,54,553/- was written off as bad debts after reducing the amount of bad debts of ₹ 60.82 lakhs from the sundry creditors written back at ₹ 120.37 lakhs. On being called upon to furnish details of bad debts, the assessee filed necessary details. Evidence regarding legal proceedings pending against three parties was also filed, whose balance stood at the aggregated figure of ₹ 41.76 lakhs. The AO observed that the assessee faile....
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....e accounts of the assessee for the previous year subject to the provisions of sec. 36(2). The Hon'ble Supreme Court in T.R.F. Ltd. vs. CIT (2010) 323 ITR 397 (SC) and the Hon'ble jurisdictional High Court in CIT vs. Star Commercial (Bombay) Pvt. Ltd.(2009) 313 ITR 126 (Bom) have held that once the assessee has written off the debt as bad debt, the requirements of sec. 36(1)(vii) are satisfied and the claim for deduction of bad debt is allowable. These judgments have laid down that the mere writing off of the bad debts in the books of account is sufficient for claiming deduction u/s.36(1)(vii) and there is no further requirement to prove that the debt should have become bad in the previous year relevant to the assessment year under considera....
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....of spare funds, whereas the other part has been claimed to have arisen from fixed deposit receipts which were required for business purposes. It is obvious that in so far as interest income on investment of spare funds is concerned, it has to be assessed under the head "Income from other sources". To this extent, the ld. A.R. has also conceded. However, interest income on FDRs, which were made for some business purposes and for pledging as Bank guarantee etc., has to be taken as "Business income" because of the reason that but for such business exigency these FDRs would not have been purchased. In such a situation, the interest income should be taxed as "business income". Since the details now sought to be placed before us by way of page-6 ....
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....n and treated it as "income from other sources". 9. After considering the rival submissions and perusing the relevant material on record, we approve the action taken by the ld. CIT(A) on this issue for the reason that primarily it is not the business of the assessee company to advance loans. Secondly, the loan was given to M/s. Medusind Solutions India P.Ltd. who were to take a part of the premises taken by the assessee on lease on a further lease for 3 years. In our considered opinion, there is no nexus of the funds advanced by the assessee to M/s. Medusind Solutions India P. Ltd. with the business carried on by it, which is that of internet and web hosting services. We, therefore, hold that such interest was rightly included under the he....
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...., there is no difference in the income arising from such leasing of data servers on a wholesale basis (as is the case under review by leasing such data servers) and that received from individual customers on retail basis. In both the cases, the business activity of the assessee, which is that of internet and web hosting services, has been carried on. We, therefore, hold that finance charges on leased assets amounting to ₹ 4,35,691/- were liable to be considered as "Business income" and not "income from other sources". We order accordingly. 11. Ground nos.3 & 4 are against non-consideration of revised computation of MAT u/s.115JB. During the course of assessment proceedings, the assessee filed a revised computation of income u/s.115JB....